Income protection insurance is a long-term insurance policy to help you if you can’t work because you’re ill or injured. It replaces part of your income if you can’t work because you become ill or disabled. It pays out until you can start working again, or until you retire, die or the end of the policy term – whichever is sooner.
There’s a waiting period before the payments start. You generally set payments to start after your sick pay ends, or after any other insurance stops covering you. The longer you wait, the lower the monthly payments.
It covers most illnesses that leave you unable to work, either in the short or long term (depending on the type of policy and its definition of incapacity).
You can claim as many times as you need to, while the policy lasts.
With income protection insurance, everything depends on getting the right policy – so it’s best to get advice from an independent financial adviser or broker like Mortgage Services Cookstown Limited.
It differs from critical illness insurance, which pays out a one-off lump sum if you have a specific serious illness.
It’s not the same as short-term income protection, which also pays out a monthly sum related to your income, but only for a limited period of time (normally between two and five years) and can cover fewer illnesses or situations.
